County reviews courthouse financing options
Bond attorney Ben Zeigler explained financing options for a new courthouse at Darlington County Council’s April 3 meeting.
Photo by Samantha Lyles
By Samantha Lyles, Staff Writer, slyles@newsandpress.net
At their April 3 regular meeting, Darlington County Council revisited the issue of how to finance construction of a new courthouse or judicial annex. Bond attorney Ben Zeigler of Haynesworth Sinkler Boyd presented Council with four viable financing options for their consideration and review.
General Obligation Bond:
• Does not require voter approval
• Financed amount limited to 8 percent of Darlington County’s taxable property value
• Total taxable properties assessed at $223,315,000 as of December 31, 2016
• Total GO Bond debt capacity is $17,865,200; Current outstanding GO Bond debt is $1,461,375
• Available GO Bond debt is approximately $16 million
Zeigler said that $16 million would not get the county very far in terms of financing a courthouse – which could cost up to $40 million – but the county could utilize a portion of that 8 percent capacity as they embark upon the project.
General Obligation Bond Debt Referendum:
• Requires voter approval
• No legal limitation on amount borrowed if approved by referendum
• Referendum can be held on any date selected by County Council with at least 60 days lead time
• Bonds must be issued within 5 years of the referendum
• 30 year maximum maturity unless bonds are sold to U.S. Government or its agencies
Like option one, the GO Bonds would be repaid through tax revenues, but Zeigler said this second would allow the county to finance as much as it needs to complete the project.
“This allows you to go beyond that 8 percent debt limit. If you’ve got a debt limit of $16 million and you need $20 million or $30 million, you can go to the voters and put that issue in front of them. If they approve the referendum, you can issue GO Bonds in an amount beyond that $16 million in order to get your project done,” Zeigler said.
Capital Project Sales Tax (CPST):
• Requires voter approval in general election year (next opportunity would be November, 2018)
• County CPST would be additional to DCSD’s CPST (which runs until March, 2032)
• Would bring local CPST total to 2 percent; County CPST would last 8 years
• GO Bonds approved by referendum would be paid by CPST, which yields about $5.3 million annually
• Requires formation of commission to formulate a project list and draft a ballot question
Zeigler said this option would not require any increase in property taxes, but the onus would be placed on everyone who purchases goods in Darlington County. He noted that Florence and Marion Counties have used the CPST successfully for civic and road improvement projects.
“It’s a good tool to use, if you think it’s the right fit politically,” said Zeigler.
Installment Purchase Revenue Bonds (IPRB):
• Does not require voter approval
• County would create a non-profit entity to issue bonds and hold title to project property
• County would have leasehold title to property and issue annual bonds to make payments to non-profit
• Preserves county’s debt capacity and allows borrowing above the 8 percent GO debt limit
• Florence, Chesterfield, and Marion Counties have used IPRB for courthouse projects
Zeigler said this option would carry higher interest rates than the other GO Bond plans, but when governments are looking for finance options that will not place the full brunt of payment on their property tax payers, the IPRB and CPST are the best options. He added that in Darlington County, it is legal to have dual CPSTs for the county and the school district.
On the regular agenda, Council held a title-only first reading of the 2017/18 fiscal year budget. The proposed general fund budget for FY 2018 stands at $21.3 million, including $5.3 million for the Darlington County Sheriff’s Office and $3.7 million for the W. Glenn Campbell Correctional Center.
Other proposed departmental budgets include $829,160 for the Emergency Telephone Fund, $1.3 million for the County Library Fund, $3.2 million for Environmental Services, $1.9 million for the Fire District, $3.8 million for Emergency Services, $482,335 for the Airport Fund, $55,525 for the State Accommodations Tax Fund, $324,716 for the Hospitality Tax Fund, $1.6 million for Road Maintenance, and $475,000 for the Hartsville Fire Protection District.
Second reading for the budget is scheduled for council’s May 1 regular meeting, which will take place at 6 p.m. in the Courthouse Annex located at 1625 Harry Byrd Hwy in Darlington. This meeting is open to the public.
Click this link to watch video of Zeigler explaining the county’s options on YouTube.
